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Bonds and Stocks Fall Again

10-05-2018

The nonfarm payroll data was sort of a mess in that this month was about 50,000 fewer jobs than expected, but the prior month was revised up by 60,000. Hurricane Florence impacted the data, but I don't think it really mattered much to the stock market in any case.

The market tried to lift initially, but it didn't take long for the selling to begin and then it accelerated to some degree, with the Dow and S&P losing 0.5% by midday and the Nasdaq a full percent, as virtually all of the momentum favorites were under pressure.

Last Meal? Interestingly enough, the slide appeared to feed on itself somewhat, and I'm sure folks were scratching their heads as to why. I think that we are most likely further into the exhaustion process than many would have guessed.

In the afternoon, the Nasdaq lost 2% before it rallied to close just 1.25% lower, while the Dow/S&P fell half that. Despite the bounce, I think today's action was pretty negative.

Away from stocks, green paper was mixed, fixed income was weaker again and it was noteworthy that the weakness in stocks did not help lift the bond market, as the 30-year traded to a yield of about 3.4%. Oil was flat and the metals were a little higher. (Meanwhile, the CFTC data remains very constructive, as gold improved slightly again while silver was a little less so.)

Housekeeping I will be traveling all next week, so there will be no Rap, but Ask Fleck will run as usual. For what it's worth, I will be participating in a RealVision interview with my longtime good friend, Jim Grant. I am really looking forward to it and will note when it is available.